PRICING AGREEMENT
November 8, 2002
To the Underwriters named in
Schedule I to the Underwriting Agreement
c/o Xxxxxxx Xxxxx Xxxxxx, Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Everest Re Capital Trust, a statutory trust formed under the laws of
the State of Delaware (the "Trust") and Everest Reinsurance Holdings, Inc, a
Delaware corporation (the "Guarantor"), propose, subject to the terms and
conditions stated herein and in the Underwriting Agreement, dated the date
hereof (the "Underwriting Agreement"), between the Trust and the Guarantor on
the one hand and the Underwriters named in Schedule I to the Underwriting
Agreement, on the other hand, to issue and sell to the Underwriters named in
Schedule I hereto (the "Underwriters") the Securities specified in Schedule II
hereto (the "Designated Securities" consisting of Firm Designated Securities and
any Optional Designated Securities the Underwriters may elect to purchase). Each
of the provisions of the Underwriting Agreement is incorporated herein by
reference in its entirety, and shall be deemed to be a part of this Agreement to
the same extent as if such provisions had been set forth in full herein; and
each of the representations and warranties set forth therein shall be deemed to
have been made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date of this Pricing
Agreement in relation to the Prospectus as amended or supplemented relating to
the Designated Securities which are the subject of this Pricing Agreement. Each
reference to the Representatives herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be deemed to refer to
you.
Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined. The Representatives designated to
act on behalf of the Representatives and on behalf of each of the Underwriters
of the Designated Securities pursuant to Section 12 of the Underwriting
Agreement and the address of the Representatives referred to in such Section 12
are set forth at the end of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, (a) the Trust agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Trust, at the time and place and
at the purchase price to the Underwriters set forth in Schedule II hereto, the
number of Firm Designated Securities set forth opposite the name of such
Underwriter in Schedule I hereto, and (b) in the event and to the extent that
the Underwriters shall exercise the election to purchase Optional Designated
Securities, as provided below, the Trust agrees to issue and sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from the Trust at the purchase price to the Underwriters set out in
Schedule II hereto that portion of the number of Optional Designated Securities
as to which such election shall have been exercised.
The Trust hereby grants to each of the Underwriters the right to
purchase at their election up to the number of Optional Designated Securities
described below on the terms referred to in the paragraph above for the sole
purpose of covering over-allotments in the sale of the Firm Designated
Securities. The number of Optional Securities, if any, to be added to the number
of Designated Securities to be purchased by each Underwriter shall be that
proportion of the Optional Designated Securities described in Schedule II hereto
which the number of Designated Securities to be purchased by such Underwriter
bears to the aggregate number of Designated Securities (rounded as the
Representatives may determine to the nearest 100 securities). Any such election
to purchase Optional Designated Securities may be exercised by written notice
from the Representatives to the Trust and the Guarantor given within a period of
30 calendar days after the date of this Pricing Agreement, setting forth the
aggregate number of Optional Designated Securities to be purchased and the date
on which such Optional Designated Securities are to be delivered, as determined
by the Representatives, but in no event earlier than the First Time of Delivery
or, unless the Representatives, the Guarantor and the Trust otherwise agree in
writing, no earlier than two or later than ten business days after the date of
such notice.
[This space intentionally left blank.]
If the foregoing is in accordance with your understanding, please sign and
return to us nine counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the
Underwriters, the Trust and the Guarantor. It is understood that your acceptance
of this letter on behalf of each of the Underwriters is or will be pursuant to
the authority set forth in a form of Agreement among Underwriters, the form of
which shall be submitted to the Guarantor for examination upon request, but
without warranty on the part of the Representatives as to the authority of the
signers thereof.
Very truly yours,
EVEREST REINSURANCE HOLDINGS, INC.
By:_______________________________________
Name:
Title:
EVEREST RE CAPITAL TRUST
By: Everest Reinsurance Holdings, Inc,
as Depositor
By:_______________________________________
Name:
Title:
Accepted as of the date hereof:
XXXXXXX XXXXX BARNEY, INC.
As Representatives of the Underwriters Named in Schedule I hereto
___________________________________
On behalf of each of the Underwriters named on Schedule I hereto
SCHEDULE I
Number of
Designated
Securities to be
Underwriters Purchased
------------ ---------
Xxxxxxx Xxxxx Xxxxxx, Inc. ...................................... 1,252,500
Xxxxxx Xxxxxxx & Co. Incorporated ............................... 1,252,500
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated .............. 1,200,000
UBS Warburg LLC ................................................. 1,200,000
Wachovia Securities,Inc. ........................................ 1,200,000
Bear, Xxxxxxx & Co. Inc ......................................... 200,000
Deutsche Banc Alex. Xxxxx Inc. .................................. 200,000
Xxxxxxx, Sachs & Co. ............................................ 200,000
Xxxxxx Brothers, Inc. ........................................... 200,000
First Tier Syndicate (as set forth in Attachment A hereto) ...... 750,000
Second Tier Syndicate (as set forth in Attachment B hereto ...... 345,000
------------
Total ................................................... 8,000,000
============
ATTACHMENT A
Number of
Designated
Securities to be
Underwriters in First Tier Syndicate Purchased
------------------------------------ ---------
X.X. Xxxxxxx & Sons, Inc. 50,000
Banc of America Securities LLC 50,000
Xxxxxxx Xxxxxx & Co., Inc. 50,000
CIBC World Markets Corp. 50,000
Xxxxxxx, Xxxxxxx & Co. 50,000
Xxxx Xxxxxxxx Incorporated 50,000
H&R Block Financial Advisors, Inc. 50,000
Xxxxx, Xxxxxxxx & Xxxxx, Inc. 50,000
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated 50,000
Prudential Securities Incorporated 50,000
Quick & Xxxxxx, Inc. 50,000
Sandler X'Xxxx & Partners, L.P. 50,000
TD Waterhouse, Inc. 50,000
US Bancorp Xxxxx Xxxxxxx Inc. 50,000
Xxxxx Fargo Xxx Xxxxxx, LLC 50,000
---------------
Total .............................................. 750,000
===============
ATTACHMENT B
Number of
Designated
Securities to be
Underwriters in Second Tier Syndicate Purchased
------------------------------------- ---------
Advest Inc. 15,000
Bank One Capital Markets, Inc. 15,000
BB&T Capital Markets 15,000
X.X. Xxxx & Associates, Inc. 15,000
X.X. Xxxxxxxx & Co. 15,000
Xxxxxxxxx & Company LLC 15,000
Xxxxxxxxxx & Co. Inc. 15,000
Xxxxxx, Xxxxx Xxxxx Inc. 15,000
Fifth Third Securities, Inc. 15,000
J.J.B Xxxxxxxx, X.X. Xxxxx, Inc. 15,000
Xxxxxx Xxxxxxxxxx Xxxxx Inc. 15,000
McDonald Investments, Inc. 15,000
Mesirow Financial, Inc. 15,000
Xxxxxx Xxxxxx & Company, Inc. 15,000
Xxxxxx / Hunter Incorporated 15,000
Pershing, a Division of Xxxxxxxxx, Xxxxxx & Xxxxxxxx 15,000
Xxxxxxx Xxxxx & Associates, Inc. 15,000
Xxxxxx X. Xxxxx & Co. Incorporated 15,000
Xxxx, Xxxx & Co., Inc. 15,000
Southwest Securities, Inc. 15,000
Xxxxxx, Xxxxxxxx & Company Incorporated 15,000
SunTrust Capital Markets, Inc. 15,000
Xxxxxxx Xxxxx & Company, L.L.C 15,000
----------------
Total ............................................... 345,000
================
SCHEDULE II
DESIGNATED TRUST:
Everest Re Capital Trust
TITLE OF DESIGNATED SECURITIES:
7.85% Preferred Securities
AGGREGATE PRINCIPAL AMOUNT:
Aggregate principal amount of Designated Securities:
$200,000,000
Maximum aggregate principal amount of Optional Designated Securities:
$25,000,000
PRICE TO PUBLIC:
100% of the principal amount of the Designated Securities, plus accrued
distributions, if any, from November 14, 2002
PURCHASE PRICE BY UNDERWRITERS:
100% of the principal amount of the Designated Securities, plus accrued
distributions, if any, from November 14, 2002
UNDERWRITERS' COMPENSATION:
$0.7875 per Designated Security
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
New York Clearing House same-day funds
ACCOUNTANTS' LETTER TO BE
DELIVERED ON DATE OF PRICING AGREEMENT:
Yes.
TRUST AGREEMENT:
Amended and Restated Trust Agreement dated November 14, 2002, between the
Guarantor and the Trustees named therein
II-1
INDENTURE:
Junior Subordinated Indenture dated as of November 14, 2002, between the
Guarantor and JPMorgan Chase Bank, as Indenture Trustee, as supplemented by a
First Supplemental Indenture thereto among the Guarantor, the Indenture Trustee
and Everest Re Group, Ltd.
GUARANTEE:
Guarantee Agreement, dated as of November 14, between Guarantor and
Guarantee Trustee
MATURITY:
November 14, 2032
INTEREST RATE:
7.85%
INTEREST PAYMENT DATES:
Each February 15, May 15, August 15 and November 15, commencing February 15,
2003.
EXTENSION PERIOD:
From time to time, but in any one case not to exceed 20 quarters.
REDEMPTION PROVISIONS:
Redemption upon a Tax Event and Investment Company Event (each as defined in the
Indenture).
Redemable in whole or in part from time to time from and after November 14, 2007
at the option of the Guarantor.
SINKING FUND PROVISIONS:
No sinking fund provisions.
TIME OF DELIVERY:
10:00 a.m., New York City time November 14, 2002
II-2
CLOSING LOCATION:
Mayer, Brown, Xxxx & Maw
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
NAMES AND ADDRESSES OF REPRESENTATIVES:
Xxxxxxx Xxxxx Barney, Inc. Xxxxxx Xxxxxxx & Co.
Attention: Xxxxx Xxxxxx Attention: Xxxxxxx Xxxxx
000 Xxxxxxxxx Xxxxxx 0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
II-3
